Not-for-profit organizations (NFPs) have more opportunities to enhance their operations with new technologies than ever before.

While reliable workhorses like spreadsheets and legacy systems are still able to deliver valuable results, modern technology solutions empower organizations to save time and resources, achieve greater efficiency, gain better controls, and make more informed decisions; All while maximizing their existing resources to ultimately help them fulfill their missions more impactfully and economically.

How technology positively impacts NFPs

Some of the top potential use cases of modernized technologies and their benefits for NFPs include:

• Accounts payable and expense management automation: Modernizing accounts payable and expense management processes can be an effective starting point for not-for-profit organizations looking to leverage new technologies and automate the most highly manual processes first. One example of this is transitioning from printing physical checks for employee expense reimbursements to using a cloud-based spend and expense application, which enables employees to submit digital receipts and receive electronic funds reimbursement. The coded employee expenses and payments then automatically sync from the application into the general ledger system for reconciliation and financial reporting. Additionally, and in the same way, accounts payable processes can and should be automated through the use of cloud-based applications. This includes routing approvals, validating expense coding, and initiating digital payments like ACH transfers or virtual cards. By centralizing and automating these tasks, automated spend and expense systems not only reduce the need for manual check printing but also improve accuracy, transparency, and operational efficiency across the organization. 
• Cloud-based ERP system transformation: The next best place to look when considering automating accounting processes is through a cloud-based Enterprise Resource Planning (ERP) system, which can enable NFPs to streamline workflows and reduce manual work. ERP systems integrate core business functions – such as finance, procurement, and compliance – into a unified platform that automates the entire accounting lifecycle including order to cash, procure to pay, and record to report processes. This type of change can significantly reduce the workload for accounting staff and employees; improve processing efficiency; and allow for scalable growth and enhanced internal controls, and can begin with an assessment or optimization of current ERP systems and lead to migration, implementation, or deployment of new systems. While the ERP transformation process requires advanced planning and resource allocation, ultimately, modernized ERP system deployment can help save time, streamline processes, and allow employees to focus on strategic tasks such as fundraising, development, and programmatic projects.
• Grant management automation: By leveraging enhanced ERP capabilities, NFPs can achieve greater automation in managing grants and other financial aspects of the organization. Implementing dimensionality or segmentation within an advanced ERP system or utilizing class tracking features within simpler general ledger systems  can improve the tracking of expenditures and activities within key buckets in a way that allows you to track the same dollar   amount based on several different purposes. This includes grants, donations, and other sources of funding and expenditures. If configured correctly, this enhanced functionality can not only save time, it can provide key insights in a timely manner to avoid overruns and misappropriation of funds.  Additionally, many NFPs are leveraging AI to digitize and summarize complex documents like restricted grant agreements and donor gift terms, significantly reducing manual review time and improving compliance accuracy. Automated reporting systems and functionality built into certain ERP systems are also streamlining grant management by tracking deadlines, managing budgets, and automatically generating once very manual reports, freeing up staff to focus on mission-critical work. In finance functions, AI is automating routine approvals, monitoring key performance indicators (KPIs), and generating real-time insights for decision-making. These technologies enhance the capacity of finance teams to deliver strategic value rather than replacing them. As ERP platforms evolve, many now include embedded AI features or integrate with third-party tools, making it easier for NFPs to adopt these innovations in a scalable, cost-effective way.   
• Take a gradual approach: For some NFPs, a lower-cost/quick-entry GL system is sufficient and easy to integrate with their existing systems. NFPs just starting out or working with less operational complexity tend to take this approach because they can still use these platforms to track their grants and donations in a basic way, and they provide enough variables to meet their needs. The scenario begins to shift as NFPs grow and need a next-tier system that can provide higher levels of operational visibility, greater automation, and more sophisticated reporting. Many organizations ultimately need an ERP with more capabilities than their existing systems can provide. Although some systems can be upgraded so the organization can utilize their more sophisticated functionality and analytics, others are not as scalable and a new ERP system might be needed.
• Point solutions: Until NFPs are ready to make the move to a more robust ERP system, they can integrate tailored point solutions that meet their requirements, such as automated reporting tools for budgeting, forecasting, and cash flow analysis. Additionally, many expense management solutions are easy to integrate and are effective at streamlining start-to-finish workflows. These options offer NFPs automated processes, robust reporting, and greater visibility into their data.   

4 steps to take now

Start here to assess your options and make decisions toward technology modernization:

1. Assess your organization’s business goals. Assess where inefficiencies exist, such as manual areas. Start with pain points and strive to align work with capabilities. Look for technology that helps your team achieve these goals and can scale up and support your organization as it evolves and grows.
2. Evaluate your current platform and any point solutions. Document the impact on resources and processes; assess costs and benefits; and get buy-in from department heads and senior leaders. Talk with your current tech stack providers and explore your options as well as your budget.
3. Develop a plan and know your options before budgeting season starts. This timing increases the opportunity to address questions and concerns during the budgeting process. Make sure to tell the story of what you need, why you need it, and how it will be beneficial. If you don’t discuss why a certain technology solution is needed and get buy-in before planning, you are less likely to get the budget you need at allocation time.
4. Consider the resources you’ll need for successful implementation. Do you have the management support, strategic plan, team training, and ongoing IT support needed for the new solutions? Plan for the right level of support by reviewing all available options, such as in-house, outsourcing, and phased implementation.

Remember: This isn’t a one-time project. After initial upgrades, NFPs should continually evaluate their tech solutions for opportunities to enhance or scale. As your organization’s needs and challenges evolve, regularly assessing your tech stack and whether it is still providing the support you need; looking to the market for what applicable new technology solutions exist can enable you to stay ahead of any changes you might require in the future. It’s important that any solution be evaluated based on what your organization is trying to achieve, your overarching technology strategy, and your available budget.

How CohnReznick can help

By putting automated processes in place, NFPs can create more comprehensive responses that can be utilized across applications and, in turn, lead to winning more funding awards. By automating grant deadline tracking, budget management, and report generation, organizations can centralize their information, streamline processes, reduce manual tasks, and do what they do best: Focus on their core missions.   

Leveraging the best practices and resources of a finance and accounting advisor with technical and industry experience – plus end-to-end knowledge of processes, people, and technology – can help you most effectively streamline processes, scale resources, and create efficiencies.

CohnReznick’s Client Advisory Services team can help you select, implement, and optimize new accounting technology that aligns with your organization’s business goals and integrates smoothly with other in-house point solutions.

Contact our team to learn more.